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Outside/inside/outside 35 advice

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    #11
    Originally posted by PerfectStorm View Post
    After 2.5 years the possibility of you being in any way meaningfully outside is vanishing by the day
    If you mean that the period of tenure is a significant indicator towards employment, case law says otherwise, I believe.

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      #12
      Originally posted by Snooky View Post

      If you mean that the period of tenure is a significant indicator towards employment, case law says otherwise, I believe.
      Please provide the case that set that precedent.
      I suspect you're wrong. I suspect you're wrong as case law is used to define what a law is, not what it is not. But as I don't know of any examples, and you (apparently) do, can you provide please?
      See You Next Tuesday

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        #13
        When you went inside due to a "blanket" determination, was it actually inside or did they decide they would only allow contractors through umbrella companies.

        Although they are exactly the same in practise, if its the latter then they haven't actually determined you inside - they just didn't want to decide one way or ther other.

        If they give you an SDS for outside, then that's their problem for the after April bit. It could present issues for your work prior to April which you determined to be outside.

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          #14
          Originally posted by Snooky View Post

          If you mean that the period of tenure is a significant indicator towards employment, case law says otherwise, I believe.
          Technically it doesn't but it erodes your status as working practices fall in to line with the perms. The JLJ partial loss was down to the fact they got lazy with the paperwork and his working practices and he just carried on so his outside status disappeared so time spent directly affected the outcome.

          It is extremely difficult for a one man LTD to keep up a client/supplier relationship when you've been there a long time. You'll become part and parcel by accepting other work, acting like the perms, being treated like the perms etc. This has been demostrated and there is case law.
          'CUK forum personality of 2011 - Winner - Yes really!!!!

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            #15
            Originally posted by northernladuk View Post

            Technically it doesn't but it erodes your status as working practices fall in to line with the perms. The JLJ partial loss was down to the fact they got lazy with the paperwork and his working practices and he just carried on so his outside status disappeared so time spent directly affected the outcome.

            It is extremely difficult for a one man LTD to keep up a client/supplier relationship when you've been there a long time. You'll become part and parcel by accepting other work, acting like the perms, being treated like the perms etc. This has been demostrated and there is case law.
            Exactly this. It is very difficult and lazy/ignorant contractors will fall into the trap.

            So Lance you can't smash all nuts with the same hammer here. It really does depend on an individual's handling of the situation.

            In my past I had a client for a long time and I forcefully kept myself aside from permies and their rules/routines. And yet all other contractors fell in line and followed client company culture because they were lackadaisical/ignorant on IR35 and so that they looked good to management. I actually argued several times with the client IT director because I would choose to work at home when I wanted to and he did not like that one bit (old school guy) - but I had engineered my contract so that my Ltd could the place of work at any time. I also had a substitute come in for a couple of weeks, someone I found and put through my books.

            Longevity in a contract should imply that you're a good consultant and in demand, so this is business success, not failure. It's about knowing the rules and applying them correctly, whether the contract is for 10 days or 10 years.

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              #16
              Originally posted by Snooky View Post

              If you mean that the period of tenure is a significant indicator towards employment, case law says otherwise, I believe.
              Put it this way: it is perfectly straightforward to adopt working practices that are strongly inside IR35 when working on a short contract and, likewise, it is perfectly straightforward to adopt working practices that are strongly outside IR35 when working on a long contract. An obvious example of the former is a temp, filling in for an employee on maternity/paternity leave, and an obvious example of the latter is a consultant that operates several clients at the same time and provides expertise that each client doesn't have. It is simply good business to maintain good clients over time.

              In other words, length of contract is broadly neutral and the case law supports this. As NLUK indicates, however, where a worker becomes part and parcel of the client, then that is a pointer towards being inside IR35 and length of contract can be correlated with being part and parcel (but you can also be part and parcel from day one).

              In other words, there is a weak link between contract length and contract status w/r to IR35, in principle and, in practice, it depends because, well, that is how IR35 works, it looks at the reality of your actual working practices.

              Comment


                #17
                Originally posted by jamesbrown View Post

                In other words, length of contract is broadly neutral and the case law supports this. As NLUK indicates, however, where a worker becomes part and parcel of the client, then that is a pointer towards being inside IR35 and length of contract can be correlated with being part and parcel (but you can also be part and parcel from day one).

                In other words, there is a weak link between contract length and contract status w/r to IR35, in principle and, in practice, it depends because, well, that is how IR35 works, it looks at the reality of your actual working practices.
                I must admit I totally disagree. I get what you are saying in principle/law but as it's so important I think you need to forget principle/law here and focus on reality.

                Nearly every contractor I've ever met over 3 to 5 years at a client is as embedded as any employee, nearly happened to me before I left. Doesn't matter how hard the contractor works on their working practices, change in client managers, apathy and all sorts make staying outside nigh on impossible. That is anecdotal evidence I get that but it's a fact. Also time spent has factored in a number of of cases. JLJs partial loss was mainly down to length (and apathy) and there have been other cases where part and parcel has been considered. Battersby vs Campbell springs to mind and we've discussed others. Who was that eejit that had been a Jaguar for decades, JohnTheBike was it. He'd been there so long he was talking and thinking like a perm!

                I think it's a bigger issue in certain roles as well. Being a Project Manager for example. Where does the line between extra work and D&C lie. You've been given five or six project in the years you've been there to the point it's impossible to argue you each is a separate piece of work. Length of time is critical for a role like this IMO. If you've been there five years it's likely you've been longer than most of the perms and carried out more projects. Difficult to argue that is a supplier arrangement. In that case, and, I would argue, most other cases of five years plus length of time directly impacts the IR35 status so is a strong link.

                I would agree that length of time is not directly and indicator of IR35 but I do think there is a very strong link between contract length and IR35 status even if that link isn't written in legislation if you get me. Maybe it's just terminology. Massive risk, and issue, a factor, a link? Not sure the wording but three to five years is as likely to be as big, if not bigger problem than the other pillars in an investigation.
                Last edited by northernladuk; 23 September 2021, 12:42.
                'CUK forum personality of 2011 - Winner - Yes really!!!!

                Comment


                  #18
                  Forget principle/law? You mean those things that a tribunal judge will consider when applying the case law tests to your actual working practices? You often refer to JLJ, but I don’t think it says what you think it says. Contract length wasn’t really the issue in that case, and to boil it down to contract length is a dramatic oversimplification; it was a contract renewal that flagged a change of working practices away from project-based work. Don’t forget, JLJ was outside for the first *three years*!

                  Comment


                    #19
                    Originally posted by jamesbrown View Post
                    Forget principle/law? You mean those things that a tribunal judge will consider when applying the case law tests to your actual working practices? You often refer to JLJ, but I don’t think it says what you think it says. Contract length wasn’t really the issue in that case, and to boil it down to contract length is a dramatic oversimplification; it was a contract renewal that flagged a change of working practices away from project-based work. Don’t forget, JLJ was outside for the first *three years*!
                    But that's my whole point. The tribunal judge will not just rule based on the principle and law. They will bring the time factor and it's affects on those points so further adding to my argument that time DOES factor because it will be considered in an investigation. If it's considered in cases and has precedent then it must therefore be a factor in an IR35 status if you get me. It's as important to manage as the three pillars are when on a long contract. The law does not say time spent is a factor but the reality is it will. You can't go in to a case of three plus years thinking time spent is not an issue because it's not in the legislation.

                    And I'd disagree about the JLJ.. You are right the contract changed but that was directly related to the time he spent there. The summary says..

                    • Judge Howard Nolan ruled in a Bristol Tax Tribunal heard on 24 and 25 October 2011 that IR35 did not apply for the first three years of the contract, but after that Spencer had then taken on all of the characteristics of an employee
                    • Spencer moved from being on a series of contracts for specific projects to having a one-year contract that was extended repeatedly over four years; and during this time his client could ask him to work on any tasks, not specific projects. In other words, he had become a ‘tail-end charlie’
                    • Control was limited up until the and of 2003, when Spencer “ceased to be engaged for identified projects” and was in reality more controlled by the client
                    • Spencer failed the ‘in-business’ tests as there was, in the Judge’s view, no opportunity to profit and Spencer was “simply paid for hours worked”
                    All of these happened three years after he started. Apathy had set in, he was part and parcel and the IR35 aspect of his contract fell by the wayside which is exactly what I am saying. If he'd done under three years he'd been good to go. He stayed too long, he became part and parcel and his IR35 case fell apart.

                    Another example is Battersby V Campbell.

                    Quotes from the case say...

                    Although he did not enjoy job security, he worked for the bank for seven years. The factors which pointed towards a contract of service outweighed those which pointed to a contract for services.
                    and in summing up..

                    (h)The relationship between the appellant and Pennyright Bank had an element of permanency as it lasted for seven years.
                    Last edited by northernladuk; 23 September 2021, 13:29.
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

                    Comment


                      #20
                      Case law is law.

                      You've got it bass-akwards. There are two problems with your argument, one is the confusion of correlation as causation and the other is the strength of the correlation. Length of contract is not the cause, it is merely correlated with bad working practices in some cases, but it's the poor working practices that cause the situation. The second problem is that your argument for a "strong link" or strong correlation is self-evidently wrong when it's easy to hypothesise cases involving short contracts that are inside and long contracts that are outside. Strong correlation seems prima facie wrong, just as a trivial/mathematical point. Some correlation seems right.

                      Even the argument for an asymmetric relationship (e.g., contract length is neutral for short contracts but all long contracts are inside) is wrong, but your assertion appears to be bolder than that.

                      If IR35 were anything like that simple, we'd effectively have strict deeming criteria, not case law. The reason why IR35 has failed, indeed the reason for Chapter 10, is that tribunal judges consider the working practices and not some noddy impression of the contract, such as contract length.

                      Cherry picking individual conclusions from these judgements doesn't work because, as always, there is a balance of pointers in either direction. I don't believe you can point to a single case where contract length was determinative (if you could, I would know about it).

                      As an aside, on what planet is "3 years" not a "long" contract?



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